Pound (GBP) subdued as retail demand weakens
The pound (GBP) struggled to gain traction yesterday as fresh evidence pointed to a continued slowdown in UK consumer spending.
The Confederation of British Industry’s (CBI) latest distributive trades survey revealed that retail order volumes slumped to their lowest level on record in September, highlighting growing signs of weakening household confidence.
With little in the way of significant UK economic data on the calendar, Sterling could lack a clear catalyst and remain rangebound today.
Euro (EUR) pressured despite stronger German sentiment
The euro (EUR) initially found some support on Thursday after Germany’s latest IFO survey revealed that business confidence had risen to a three-year high in September.
However, this failed to translate into sustained gains for the single currency, with the euro continuing to face pressure from its inverse relationship with the US dollar (USD).
Looking ahead to the close of the week, Germany’s latest consumer confidence figures could weigh on the euro after household sentiment was shown to have fallen by more than expected heading into October.
US dollar (USD) maintains upward momentum
The US dollar (USD) extended its recent advance on Thursday, with the US dollar index climbing to fresh multi-week highs.
Continued speculation that the Federal Reserve could pursue a more aggressive pace of monetary tightening provided a key source of support for the ‘greenback’, while an unexpected decline in new US jobless claims offered an additional boost.
However, the latest US durable goods figures could interrupt the dollar’s recent rally today, with August’s data forecast to show that new orders contracted.
Canadian dollar (CAD) mixed following retail sales figures
The Canadian dollar (CAD) traded unevenly on Thursday after domestic retail sales data showed that July’s growth was weaker than initially estimated, although August’s preliminary figures pointed to a stronger-than-expected rebound.
The ‘loonie’ could come under pressure today if reports of a phased agreement to reopen the Strait of Hormuz contribute to another decline in oil prices.
Australian dollar (AUD) lifted by improving risk appetite
The Australian dollar (AUD) moved broadly higher overnight as the risk-sensitive ‘Aussie’ benefited from a more positive tone across global markets.
New Zealand dollar (NZD) subdued as RBNZ expectations soften
The New Zealand dollar (NZD) failed to capitalise on the brighter risk environment overnight, with a dovish shift in expectations for Reserve Bank of New Zealand (RBNZ) interest rates offsetting potential support from improved market sentiment.
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